Economist Pascal Salin once said economic reality was difficult to comprehend unless one first had a firm grasp of economic theory.

He then went on to say: "[T]here is nothing more practical than theory."

This may sound like one of those too-clever-by-half throwaway comments – but it's actually very true – whatever the discipline.

Given the crazy complexity of real life, the sheer unpredictability of it all, theories have to be set out in the form of a framework, or as a set of parameters or principles, within or against which reality can then be tested. As time passes the theory will remain in place, as long as or until, it is contradicted by what's actually going on out in the real world.

In the meantime, the process of evidence collection and analysis provides a focus for both discussion and research.

In other words it gives us direction - something Western economies have lost in the last five to ten years. It's no longer competing theories about central planning versus free markets or something in the middle.

There is no theory which predicts where we're heading.

But there is one which helps to explain how we got to this point.

To understand what it is and where it came from, we must travel back to the second half of the nineteenth century. Marxist theory, which was steadily gaining a foothold, predicted workers in industrialised countries would eventually rise up against their masters and take control.

According to the theory this was inevitable.

About fifty years later, in 1917, the Russian Revolution kicked off - but it did not lead to a wave of similar uprisings throughout the rest of Europe.

Reality contradicted theory.

However, rather than reject the theory, Marxist intellectuals formulated an excuse in order to explain its failure. This excuse may strike people nowadays as a bit loopy - but I hope you stick with the story – because it does all come together in the end.

What they did was to attempt to merge Marxist and Freudian thinking.

The basic idea was that the revolution in Russia failed to spread throughout Europe because the workers were suffering from various forms of mental illness, caused by millennia of repression.

Therefore the great problem for the "new" Marxists was not an economic one – not one primarily to do with ownership of the means of production - but rather a cultural one.

Western culture had first to be destroyed before "classical" Marxism could really have its chance. So the question was posed – if armed uprising or all-out rebellion were ruled out, how could they bring about this destruction of Western culture?

In Germany, in 1923, a group of intellectuals came together to form what became known as the Frankfurt School.

They reasoned that a culture could only be changed if there was a change in the way people thought. How could this be done? Well, if people could be engineered and/or coerced into speaking in a very particular and specific way, this would eventually determine how they thought.

Since the mentally damaged masses were incapable of organizing themselves, they could not possibly bring this change about by themselves. Therefore "surrogates" had to be found – highly political minority groups – who would do it for them.

The method they would use came to be called Critical Theory (CT). Quite simply this meant these surrogate groups had to motivate their members to attack everything and anything in their society – and do so in the most vociferous, aggressive and determined manner possible.

Get inside the system and make it work against itself.

In the end, given the apathy of the masses, if there were enough of them doing it, hard enough and for long enough the "system" would crack.

Maybe at this point you're beginning to think this is not just a bit loopy - but downright nuts!

Yes, the Marxist/Freudian bit is nonsense – both Left and Right rejected it long ago – but not the CT part.

This has proved to be anything but nonsense.

To continue - when the Nazi Party came to power in 1933, the members of the school skedaddled – understandably. Most, if not all, ended up in America, spreading out to various cities and universities.

For the next twenty five years or so, according to right-wing conspiracy theorists, they quietly bided their time. Then, in the 1960s, when America's first generation of airheads came of age, they made their move!

Like most conspiracy theories there's enough there to pique the interest – but upon closer examination that's all it does.

There is no question the 1960s were a momentous decade. But to suggest the massive cultural upheaval was orchestrated by the remnants of the Frankfurt School is more than a stretch.

This was happenstance – it could not possibly have been planned.

But what emerged from it was in fact CT – under the guise of what was later labelled "political correctness" (PC).

By the late 1980s PC had definitely arrived – but it was still early days.

"To encourage more conscious, self-reflective, sensitive language and behavior is not to tyrannize. To advocate conscientiously constructed codes that address rare and egregious infractions of common decency and civility is not to call for a thought police."

Which sounded reasonable enough at the time.

But only eight years later, PC conspiracy-theorist-in-chief, William Lind, would say:

"For the first time in our history, Americans have to be fearful of what they say, of what they write, and of what they think. They have to be afraid of using the wrong word, a word denounced as offensive or insensitive, or racist, sexist, or homophobic."

And who could say he was wrong?

Or that it went on to get much worse?

In the same piece he referred to PC as "cultural Marxism" (CM).

And then a few years later he wrote:

"Political correctness is Marxism, with all that implies: loss of freedom of expression, thought control, inversion of the traditional social order and, ultimately, a totalitarian state." (LifeSiteNews.net 2005)

Two observations about this last quote; first, I have little doubt the prime movers behind all the myriad minority groups were driven almost exclusively by nothing more than self-interest and greed – not ideology – grab what you can, for as long as you can, while you still can; and second, too many states have now passed the point of no return – forget about a future "totalitarian state" – if there is any hope for the others it must lie with secession and eventual dissolution of the Union.

There's only one thing we do know for sure – at base, the Frankfurt boys were right after all.

Reality has not contradicted theory.

CT/PC/CM – whichever title you prefer - is tearing Western culture asunder right before our very eyes.

And no-one can do a thing about it.

Many must have thought PC reached its zenith with the election of the most unqualified and inexperienced person ever to reach the White House. But no, it got even worse. After four disastrous years he was actually re-elected.

Democracy and the whole concept of universal suffrage no longer works as intended – it cannot – not when the system is so fractured and split. Not when multiple minority groups can band together and vote as a block – and swing elections.

And especially not when over 60% of the white majority can go for one candidate – and still lose.

This is a recipe for disaster – social, political and economic.

Where we end up when CT has run its course is unknowable.

There is no theory, no framework – there are no parameters - and in the absence thereof, we're like a rudderless ship sailing into an unchartered ocean.

And a stormy one at that.

Chris Clancy lived in China for seven years. Most of this time was spent as associate professor of financial accounting at Zhongnan University of Economics and Law in Wuhan City, Hubei Province. He now lives in Thailand where he spends his time reading, writing, lecturing and, whenever he gets the chance, doing his level best to spread Austrian economics.